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18 Jun, 2009 09:47

Russia-Belarus: who is milking who?

Russia-Belarus: who is milking who?

After the Russia-Belarus row over dairy products ended in a “compromise” and insignificant changes in the list of Belarusian supplies to Russia, one cannot help but wonder what it was all about.

Was it Moscow or Minsk that hoped for some better outcome which, for whatever reason, did not occur? Or was it much ado about nothing?

Lost in translation

On June 6 Russia’s Chief Sanitary Inspector Gennady Onishchenko banned around 500 items of Belarusian dairy products from being traded in Russian shops and supermarkets. At the time it seemed like an ordinary economic policy move, at least for the Russians. But for Belarus, which is suffering bitterly from the economic crisis, the disruption of the milk exports – a source of around US$1 billion yearly for the country’s budget – immediately became a political matter.

About 45% of the country’s dairy plants’ production is sold to Russia. The protraction of the crisis threatened to destroy not only the milk industry (producers claim they would need years to find new markets comparable to Russia’s), but also the whole agriculture sector – the pride of Mr.Lukashenko, who has been investing in it billions of dollars annually. It is also worth saying that a few days before the row, Russia refused to pay the last US$500 million tranche of a $2 billion loan it promised Belarus at the end of 2008. This alone brought Belarus to the brink of financial catastrophe. But beyond all actual and potential economic losses, a long pause in Belarus-Russia dairy trade would mean the destruction of the Belarusian President’s electoral base. That would mean social and political unrest in the republic in the nearest future.

The first week of the milk row was like a talk between blind, deaf and dumb people: Russia’s media did not pay much attention to the issue, while Minsk was feverishly seeking a way to solve the problem. Belarusian experts, media and state authorities were getting more and more hysterical, and even Russophobic, while most of their Russian counterparts saw nothing special. That is why the Belarusian leader’s stance on the CSTO summit in Moscow came as an unpleasant surprise. Then we heard that Russia’s leadership was going to consider a means of “punishing” its “unfaithful” ally. However, in the following days – from June 15 to June 17 – no major offensive steps were taken, while Belarus managed to introduce a 1-day customs control on the border with Russia. The conflict ended up in an agreement to reduce the quantity of Belarusian desiccated milk and increase the volume of cheese, curds and other dairy products exported from Belarus to Russia.

Takeover with “bear” hands?

There was no doubt in Belarus that Gennady Onischenko’s activities were a sign of a strategic political intention aimed at Minsk. Belarusian authorities were looking for the “person behind” Russia’s Chief Sanitary Inspector, and the logic of the recent relations with Russia led them directly to the figure Vladimir Putin, who is still perceived in Belarus as the “real holder” of supreme leadership in Russia. Throughout last spring, Belarusian President Aleksandr Lukashenko repeatedly claimed that the Federal Government (i.e. Vladimir Putin) was sabotaging the realization of agreements that he and Dmitry Medvedev concluded during their bilateral meetings. Thus, in the view of the politicians in Minsk the milk row was just the next step.

A few days ago, the majority of Belarusian experts also did not doubt that Mr. Putin had his reasons to attack Belarus on the eve of the CSTO summit. They were only discussing what his motives were. Among the most popular versions were the lobbying of Russia’s milk industry, an attempt at a corporate forcible takeover of Belarus’ dairy industry and the punishment of Minsk for participation in the EU-Eastern Partnership program. The most radical of the commentators even stated that the milk affair was the preparation of an anti-Lukashenko coup d’etat in Belarus, controlled from Moscow. However, the Belarusian President himself named the conflict yet another attempt of “taking us with bare hands”, referring to the alleged Russian oligarchs’ intent to buy up Belarusian industry at low crisis prices.

However, when the conflict ended up with no particular advantage to any of the sides, the Belarusian expert community was left to wonder what prize Moscow had received (or hoped to get) in the end.

Is everything like it used to be?

Frankly, the theory that the Russian Prime Minister deliberately fueled the conflict right before the CSTO summit – which was to adopt new instruments for creating the Russia-centered regional security system in Central Asia (an idea actively promoted by Vladimir Putin’s associates) – seems not very sound. It would have been in the Russian Prime Minister’s interests to provide the summit decisions with as much unanimity as possible. This is also true for President Dmitry Medvedev, who a couple of weeks earlier expressed Russia’s interest in buying the Belarusian milk industry. That was a statement many Minsk analysts also mentioned in the days of the conflict.

Some versions discussed in Belarus say Putin was a passive player. Belarusian political analyst Victor Andreyev writes in his blog: “It seems that Russian liberals used V. Putin’s personal dislike towards Lukashenko for discriminating against V. Putin himself. And the pro-western figures in the Belarusian leadership played along with them”.

In any case, was the end of the conflict a return to the status quo? Belarusian analysts see the Moscow agreements and the new conditions for the Belarusian dairy products’ export to Russia as a pure Minsk victory. Belarusian expert Yury Shevtsov, for example, wrote in his blog: “If there is no joker in it, it is an incredibly pure and explicit victory. I cannot believe it! … So much has been done for the Belarus’ rapprochement with the West, as well as for the creation of an anti-Union lobby in Russia itself! Lukashenko’s hands are untied for any agreement with Turkmenistan, Western states etc, and those agreements are being prepared in full swing”.

In fact there is hardly anything Russia can set against such a diagnosis. Having gained only minor concessions in bilateral trade the Russian leadership is actually creating a new trouble-spot at its western borders, which may become a “second Ukraine”. Bearing in mind the shaky situation in Central Asia and the Northern Caucasus, as well as high tensions in Russia-Ukraine relations and problems in the Russian economy, this is not good news for Moscow. By common estimate, such a complication might deepen the differences inside the Russian political elite.

Darya Sologub for RT